Nony, a fashion company director in New York, USA, used to splurge on clothing and shoes from brands like Balmain, Dolce & Gabbana, Celine, and Chanel. Last year, she began to feel disillusioned with luxury shopping. "Some brands charge 10,000 USD for a handbag even though they haven't changed anything and aren't any better," she said.
Nony has noticed a similar sentiment among her peers, with many abandoning their luxury shopping habits. The luxury goods sector, which once saw growth double that of the global GDP, has now experienced two consecutive years of declining sales. This decline is attributed to the volatile global economy, slowing demand from China, and a decrease in the cultural cachet of these brands.
According to Bain & Company, an estimated 50 million consumers have exited the luxury goods market between 2022 and 2024, with the "aspirational customer" segment no longer making purchases due to rising prices. A report by HSBC bank indicates that the average price of luxury goods in Europe has increased by approximately 52% since 2019, as they are sold at 8 to 12 times their production cost.
Despite many brands adjusting their strategies to cater to the ultra-wealthy, many consumers remain disappointed with the value proposition. These brands have consistently reported significant losses.
Erwan Rambourg, global head of consumer and retail equity research at HSBC, identifies the difficult economic climate due to trade tensions and tariffs as a contributing factor, exacerbated by self-inflicted errors related to inflation and a lack of innovation.
Simultaneously, the luxury goods industry is facing an identity crisis. A growing number of consumers across all income levels are becoming weary of products they no longer perceive as worth the high price tag.
"The luxury industry has destroyed its own brand narrative of scarcity and will need to work hard to rebuild it," says Healey, a TikTok influencer. The increasing prevalence of products "inspired" by the mass market has further blurred the lines in terms of quality between luxury and affordable goods.
The world of luxury fashion was once a passion for Bethenny Frankel, a reality television star in the USA. Late last year, she was turned away from a Chanel store in Chicago for not having an appointment. This incident sparked deeper reflections on how luxury brands treat their customers. She observed that they not only increase prices unreasonably but also dictate who is worthy of purchasing their products.
Since then, Frankel has started showcasing affordable yet high-quality handbags. In her video series titled "Handbag University," she emphasizes that high prices do not always equate to commensurate value.
"Both the middle class and the wealthy are tired of luxury goods," she says. This explains why many are seeking alternatives or even supporting high-quality counterfeits as a form of protest.
Meanwhile, Nony Odum now allocates her funds to travel, home decor, and hair styling instead of designer goods. She has received considerable feedback from other women who share her sentiment.
"I want to love what I buy and use it until it falls apart; otherwise, I won't buy it," she says.
Ngoc Ngan (According to CNA)
